Yahoo preparing to sue Facebook?

BusinessInsider is citing a source familiar with negotiations between Yahoo and Facebook. Talks have been ongoing between the two after Yahoo approached Facebook over alleged patent infringement. Yahoo CEO Scott Thompson now favors taking legal action against Facebook over the matter, according to the source.

The patent dispute comes down to aspects of Facebooks advertising and social networking services, which Yahoo claims to own patents related to.

"Yahoo! has a responsibility to its shareholders, employees and other stakeholders to protect its intellectual property. We have invested substantial resources into these innovations. Recognizing that, other major web and technology companies have already licensed some of these technologies. We must insist that Facebook either enter into a licensing agreement or we will be compelled to move forward unilaterally to protect our rights."

BusinessInsider cites a second source, reporting that Yahoo will seek a percentage of Faceboook's revenue going forward.